This paper discusses how evaluation isan essential tool for good budgeting and a core element ofany well-designed government wide performance budgetingsystem. It is organized into 5 sections: (1) Evaluation andperformance budgeting- the principle outlines the role whichevaluation should, in principle, play in supporting goodbudgeting. It identifies the key ways performanceinformation in general supports budgeting and then outlinesthe way performance budgeting seeks to structure thecontribution of performance information to budgeting. Thesection concludes by discussing the nature and role ofevaluation as a key component of the performance informationbase for budgeting. (2) Evaluation and performance budgetingin practice reviews the actual relationship betweenevaluation and performance budgeting by looking at theexperiences of countries that have made substantial effortsto implement both. (3) Recent Efforts to Connect Evaluationand Budgeting discusses the global financial crisis, renewedinterest in the role of evaluation as a budgetary tool isincreasingly apparent among OECD countries, with countriessuch as the United States and the Netherlands making movesin this direction. (4) How to Better Connect Evaluation andBudgeting requires two things. First, evaluation needs to bemade more useful for budgeting. Second, the budget processneeds to focus more on expenditure prioritization andperformance. (5) Conclusions.